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Gov Defends Tax Incentives on YouTube

The Governor released the following YouTube message last Friday addressing the current budget situation. There are plenty of interesting elements, including a defense of tax incentives.

A few of the comments:

I believe in lower taxes, in small government and in helping our employers and entrepreneurs create jobs and grow revenue.

The other side believes in higher taxes, in bigger government, and in protecting public sector employees at the expense of the private sector.


higher taxes mean fewer jobs. It’s very simple.

Also, some have suggested that business tax incentives, like our tax credit for homebuyers, or our credit for companies that hire new workers, are to blame for our deficit.

How absurd is that. Look at the numbers.

Over the last decade, changes to our tax structure have not led to a decrease in corporate revenues but rather to an increase of $9 billion.

In the meantime, salaries and benefits for public sector employees will cost us $32 billion this year alone.

That is up 65 percent from just ten years ago, even though our revenues went up only 24 percent over the last ten years.

And what is hurting California is the same thing hurting governments and economies around the world.

Ask yourself: is it the tax incentives that are strangling Greece, France, Spain, England and those countries? Or is it unsustainable costs and entitlements of growing governments?

As former Speaker Willie Brown has pointed out, 80 percent of every government dollar in California is spent on public employee compensation and benefits.

He hit the nail on the head.

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